Residents across five diverse, fiscally stressed states have similar priorities for state government, but their preferences clash with budget reality, according to a new report released by the Pew Center on the States and the Public Policy Institute of California (PPIC). The in-depth report is based on surveys in Arizona, California, Florida, Illinois and New York of public attitudes about the fiscal crisis facing states and what residents think their elected officials should do about it. The analysis shows that policy leaders have much work to do if they want residents to understand the severity of their state's fiscal challenges and support painful decisions that may be required.

Together, the five states surveyed comprise almost a third of the U.S. population and almost a third of the nation's economic output. Collectively, they accounted for 45 percent of states' total projected budget gaps for fiscal year 2011.

“There is a disconnect between what the public wants and what is needed to resolve the states' fiscal crisis,” said Susan Urahn, managing director of the Pew Center on the States. “Policy makers will have to make unpopular budget decisions to help their states fully recover.”

“After years of economic and fiscal challenges, residents of these stressed states are frustrated and distrustful. New leaders will have much ground to make up post-November,” said Mark Baldassare, president and CEO of the Public Policy Institute of California. “They will need to begin to build public confidence in the effectiveness and efficiency of state government.”

The report, Facing Facts: Public Attitudes and Fiscal Realities in Five Stressed States, is the first in-depth, multi-state read on how residents view their state's budget problems during the nationwide economic downturn and what they think lawmakers should or should not do about them. The findings uncover the public mindset that newly elected lawmakers will face as states enter their fourth year of severe budget challenges. At least half the nation's governors and many state legislators are likely to be new, and they immediately will be asked to forge solutions to an array of vexing fiscal problems.

The report highlights five key findings across the five states:

Government Performance Matters: Public sentiment for reducing waste and making state government more efficient and effective is more widespread in the five states surveyed than are complaints about the size of government. While at least four in 10 in Arizona, California, Florida, Illinois and New York say state government is too big, even more respondents express a sense that state government can be better run, with less waste and more efficiency.

Majorities in four of the five states say “a lot” is wasted. About two out of three residents say their state government could spend less and still provide the same level of services. Most of those respondents think there is room for reductions of 10 percent to 20 percent or more. Spending cuts are the most popular first choice for balancing state budgets—yet at least four out of five respondents are either somewhat or very concerned about the effects of cuts on services. Overall, the most robust message is that residents would like state leaders to maximize returns on taxpayers' dollars.

Protect the Essentials: By a range of 63 percent to 71 percent, majorities in all five states say they would be willing to pay higher taxes to keep K-12 public schools at current funding levels. Fifty-two percent to 57 percent say they would pay higher taxes to preserve funding for health and human services. These findings make clear what respondents want government to prioritize—but they also complicate the task of policy makers. The size of budget shortfalls in all five states will make fully protecting K-12 education and Medicaid, the biggest recipients of state dollars, difficult. Doing so would compel deeper cuts everywhere else, and even then may not be enough.

Tax the Other Guy: Residents would prefer to charge the other guy—particularly the wealthy, corporations and smokers, drinkers and gamblers. These revenue streams likely would not be sufficient to address their state's budget shortfalls.

No More Borrowing: Residents are tired of lawmakers passing the costs down to future generations. Overwhelmingly, they would rather keep cutting and taxing, if necessary, than see short-term deficits papered over with borrowing. Given three choices to balance state budgets, more than two-thirds of residents in all five states pick spending cuts first; they prefer tax increases second and then borrowing. Across the states, only 5 percent to 11 percent of respondents choose borrowing as the top option to balance their state's budgets.

Lack of Trust—and Desire for Reform: Across all five states, two-thirds or more of respondents report that they either never trust state government to do what is right, or trust it only some of the time. Residents overwhelmingly believe their state should pursue major reforms to their budget processes, and pursue them now.

At least 1,000 residents were interviewed in June 2010 in each of the five states to provide statistically sound findings within each locale, plus allow for rare multi-state comparisons. To generate custom tables and charts using survey data from the five states click here. Please note: source for all data is “Pew Center on the States and Public Policy Institute of California 2010.”

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